CANADIAN VEHICLE VICARIOUS LIABILITY REPORT Prepared for the Canadian Finance & Leasing Association by Miller Thomson LLP and Stewart Mckelvey LLP
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As at April 19, 2013, except updated British Columbia (June 2015); Ontario (June 2015); Saskatchewan (January 2014) & Prince Edward Island (February 2014) CANADIAN VEHICLE VICARIOUS LIABILITY REPORT prepared for the Canadian Finance & Leasing Association by Miller Thomson LLP and Stewart McKelvey LLP Ryan W. Morasiewicz – British Columbia Nancy Rubin - Nova Scotia Joseph Yurkovich – Alberta Janet Clark - Prince Edward Island Francis Poulin - Saskatchewan Steven Scruton - Newfoundland and Labrador Reginald Watson, Q.C. – Saskatchewan Sarah Dever Letson - New Brunswick Jennifer Babe – Ontario Bruce McCartney – Ontario Pierre Paquet – Québec TABLE OF CONTENTS Page Introduction …………………………………..………… 1 Alberta ……………………………………..…………… 4 British Columbia …………………….………………… 10 Manitoba ……………………………………….…….... 13 New Brunswick ………………………………..…….... 14 Newfoundland and Labrador …………………..……. 20 Nova Scotia …………………………….………...…… 21 Ontario ………………………………………..…..…… 28 Prince Edward Island …………………….….….…… 32 Québec …………………………………………...…… 36 Saskatchewan ………………………………………... 37 15 Toronto Street, Suite 301, Toronto, Ontario, Canada M5C 2E3 Tel: 416.860-1133 toll free: 1.877.213-7373 fax: (416.860.1140 e-mail: [email protected] website: www.cfla-acfl.ca 15 rue Toronto, Bureau 301, Toronto (Ontario) Canada M5C 2E3 Téléphone: 416.860.1133 sans frais: 1.877.213.7373 télécopieur: 416.860.1140 courriel: [email protected] site web: www.cfla-acfl.ca CANADIAN VICARIOUS LIABILITY REPORT as at April 19, 2013, except updated: British Columbia (June 2015), Ontario (June 2015) and Saskatchewan (January 2014) & Prince Edward Island (February 2014) VEHICLE OWNER VICARIOUS LIABILITY (CANADA) This report is a summary of the key legislation in the Canadian Provinces which imposes vicarious liability on lessors, renters and conditional sale vendors as owners of motor vehicles for damages caused by lessee, rental customer and conditional sale purchaser drivers. Exceptions for certain classes of vehicles are noted. The chart is not exhaustive and does not cover other or all situations in which an owner of a motor vehicle may be held liable. Generally speaking, the following parties are exposed to claims for vicarious liability for personal injury claims as owners of motor vehicles, but please read the chart for more detail: (a) Lessors/renters whose leases have options to purchase: BC*, Alberta*, Saskatchewan*, Manitoba*, Ontario*, PEI* (b) Lessors/renters whose leases have no options to purchase: BC*, Alberta*, Saskatchewan*, Manitoba*, Ontario*, New Brunswick, Nova Scotia, PEI and Newfoundland and Labrador (c) conditional sale vendors: Alberta, Ontario, PEI* *Sask: has a right for residents to purchase tort claim insurance and with case law, rights to certain benefits above no fault insurance *Ontario: has capped lessor liability for personal injuries for accidents that occurred on or after March 1, 2006, but there is liability for property damages *B.C. has capped lessor liability for personal injuries for accidents that occurred on or after November 8, 2007; based on case law this capped liability is $1 million from lessee + $1 million from lessor *AB: has capped lessor liability for personal injuries for accidents that occurred on or after March 1, 2011 *Quebec: has no liability for personal injuries, but there is liability for property damage for vehicles leased for a term of less than one year *Manitoba: has no liability for personal injuries, but property damage liability continues * NS: has no liability for conditional sellers and lessors with an option to purchase *PEI: has no liability for conditional sellers and lessors with an option to purchase, for accidents occurring on or after February 1, 2014 There is no legislated cap on damages for vicarious liability in any of the provinces, except in Ontario, BC, Alberta and Nova Scotia and only in the circumstances as noted below. The vicarious liability cap does not appear to be limited to personal injury claims in Nova Scotia but also caps third party property and environmental damages. Page 1 of 47 CANADIAN VICARIOUS LIABILITY REPORT as at April 19, 2013, except updated: British Columbia (June 2015), Ontario (June 2015) and Saskatchewan (January 2014) & Prince Edward Island (February 2014) These do not protect against property damages in Ontario or environmental claims. They do not protect against product liability claims or negligence for provision of a defective or badly maintained or equipped motor vehicle. Provincial legislation imposing a vicarious liability “cap” of $1 million on vehicle lessors and rental companies was adopted in Ontario (effective date March 1, 2006), followed by British Columbia (effective date November 8, 2007), then Alberta (effective date March 1, 2011), and finally Nova Scotia (effective date April 1, 2013). However, while a $1 million cap is common to all four jurisdictions, the provincial legislation in these four provinces varies as follows: Ontario - The 2006 amendments to the Insurance Act and Highway Traffic Act (Ontario) caps the vicarious liability of lessors and rental companies at $1million for loss or damage from bodily injury or death arising directly or indirectly from the use or operation of a motor vehicle that is leased or rented. If the customer has $1 million of valid insurance, there is nothing due from the lessor. If the customer has less than $1 million of valid insurance, the lessor or rental company is liable for the difference up to $1million and no more for bodily injury. The Ontario legislation does not “cap” vicarious liability for lessors or rental companies for (i) property damage; or (ii) for accidents involving taxicabs, limousines or “livery vehicles” [as defined in Regulation passed pursuant to the Insurance Act]; or (iii) for accidents caused their employees. The liability for the driver, lessee or rental customer, or the operator of a vehicle or the employer of the driver of a vehicle remains unlimited. 7.(1) For the purposes of clause 267.12 (4) (c) of the Act, a livery vehicle is a motor vehicle, (a) that is designed for transporting not more than nine passengers; and (b) that is not a taxicab or limousine. (2) Subsection 267.12 (1) of the Act does not apply in respect of a livery vehicle during any period in which it is used to transport passengers for a fee. British Columbia –2007 legislative amendments in British Columbia cap the vicarious liability of lessors and rental companies for their vehicles in British Columbia, other than for vehicles used as taxis, buses, and limousines. The wording of the British Columbia amendments have been interpreted such that a payment of $1 million under the lessee’s insurance has the effect of reducing the statutory liability of the lessor to the full extent of the payment made. The British Columbia Court of Appeal also found that a driver of a leased vehicle may seek additional indemnification pursuant to the lessor’s excess policy unless the lessor’s insurance includes a specific exclusion as required by British Columbia law. Alberta - The statutory and regulatory provisions relevant to the Alberta cap on vicarious liability that came into effect March 1, 2011 are contained in the Alberta Traffic Safety Act and related Commercial Vehicle Certificate and Insurance Regulation and the Alberta Insurance Act and its related Miscellaneous Provisions Regulation. The Traffic Safety Act provides a blanket $1 million cap on claims for “loss or damage sustained by a person”. Therefore, while this proviso does not specifically continue on to reference “property” (as B.C.’s corresponding legislation does) the wording appears to cover losses other than Page 2 of 46 CANADIAN VICARIOUS LIABILITY REPORT as at April 19, 2013, except updated: British Columbia (June 2015), Ontario (June 2015) and Saskatchewan (January 2014) & Prince Edward Island (February 2014) personal injuries sustained by individuals and is significantly broader than the corresponding provision (section 267.12) of the Ontario Insurance Act. The only exception is that by Section 31.1 of the Commercial Vehicle Certificate and Insurance Regulation, all commercial vehicles used or intended to be used to transport passengers, including taxis, buses, limousines, airport shuttles, funeral service and other passenger vehicles that are driven or owned by persons who have broadly defined financial interests or other business or blood relationships with lenders, lessors, renters or sellers of those vehicles, are excluded from the limitation on liability provided by the cap regime. Nova Scotia – The Nova Scotia Insurance Act and the Non-Owned Automobile Insurance Liability Regulations exempt conditional sellers, and cap the vicarious liability of rental companies and lessors whose leases have no option to purchase. The provisions came into effect April 1, 2013. A lessor or renter’s maximum liability under the Insurance Act is net of all other amounts received in respect of the same incident and a lessor or renter will not be required to make any payments to a claimant beyond a top-up to the prescribed maximum liability of $1 million (or greater if required by law or prescribed by regulation). The Non-Owned Automobile Insurance Liability Regulations establish the priority of payment among automobile insurance policies in reference to “motor vehicle liability policies” which are defined under the Insurance Act to include property damage. Although the vicarious liability provisions have not yet received judicial consideration, the wording suggests that the vicarious